Working together for a successful energy transition

Commissioner, excellencies, ladies and gentlemen.

Energy is one of the main elements of EU – Norway collaboration.

Our close partnership is well established, to the benefit of both parties. And I had a very good meeting with the Commissioner this morning.

With the EEA Agreement, we have a common legal framework. The agreement gives stability, and a level playing field.

This year, we celebrate the 25 year anniversary of the EEA agreement! And our energy relationship is even wider than the EEA Agreement. Access to secure and affordable energy is key, both to social and economic development. At the same time, a large share of emissions comes from the energy sector.

I have to congratulate the Commissioner with successful negotiations on the Clean Energy Package.

Last year, the Commission also published the EU long-term strategy towards 2050: "A Clean Planet for all". We have read the strategy with great interest. We look forward to continue our close energy collaboration with the EU, and enable the energy transition.

Today, we will have two panels discussing both the role of natural gas, and decarbonisation in industry. In addition, there will be a side-event dedicated to carbon capture, utilisation and storage.

Norway will continue to be a stable and predictable supplier of energy to the EU. I believe natural gas has a key role to play in the European energy mix for decades to come. Gas has a lot to offer in the transition to a low carbon energy system.

Gas is affordable, available, flexible and reliable. It also has low emissions. It is therefore widely used for heating, in industry and in the power sector.

Norway's gas exports covers 25 percent of the European gas use. Our gas exports to the EU has been record high the last years. Most of the gas is exported through our extensive pipeline network. This network now goes beyond the Arctic circle!

Norwegian gas exports to Europe began in the 1970s. We have been through a strong growth period since the mid-1990s, and are now at a stable level.

Around one third of our estimated gas resources have been produced. This means that we have a lot of gas left to produce. We expect a high and stable level of gas exports to the EU in the years to come.

As the share of intermittent energy generation grows in Europe, the need for balancing power will become more important. Natural gas is a very flexible energy source. It can handle large variations in energy supply and demand. Gas is an essential partner for the large-scale development of wind and solar power.

Gas can respond quickly on days when the sun does not shine, or there is no wind. And on days where demand for energy is high. Natural gas also has far lower greenhouse gas emissions than coal.

And the climate footprint of Norwegian gas is far lower than the world average, because of strict environmental rules on the Norwegian Continental Shelf.

Replacing coal with gas is a fast and cost-effective way to reduce emissions. We see this demonstrated for instance in the UK, the US and China.

In a decarbonized Europe beyond 2050, the established gas infrastructure could be used both for biogas and hydrogen made by natural gas reforming. Conversion of natural gas is today the most common and cost effective process for producing hydrogen. Combined with CCS, it could be an attractive source of energy in a future zero-emission energy sector.

The “Clean Planet for All” report shows different scenarios for the future role of gas, and use of existing gas infrastructure. We believe technology neutrality is key, and are looking forward to contributing in the discussions the coming year. Norway has a long tradition for a market-based approach for trade and production of renewable electricity.

Nearly all of our electricity production comes from renewables, mainly hydropower. We are well integrated with the Nordic and European electricity markets. Our large hydropower reservoirs offer valuable flexibility into the market.

New inter-connectors to Germany and the UK are under construction. Wind power is increasing its share in Norwegian electricity production. We also work to develop offshore wind. One of the world's first offshore wind farms, Hywind Scotland, had its pilot days in Norwegian waters.

I am glad to see you mentioned this project in you In-depth analysis for the EU's strategy. A great benefit of a market-based approach, is that it enables more efficient use of our resources. The benefit of trade stems from differences in power production and consumption. Market based solutions offer flexibility.

I am glad to see that market principles are more central in the new EU legislation. It is also important that TSOs and market participants are free to find good, innovative and practical solutions together.

The Nordic power market is closely integrated with Europe. It is important that the EEA Agreement ensures harmonized market rules . The third energy market package is an important step forward.

A decision to incorporate the package into the EEA Agreement was adopted in May 2017. Norway is eager to implement the package:

• A majority in the Norwegian Parliament has accepted the package.
• Necessary amendments in Norwegian law have also been approved by the Parliament.

The Icelandic parliament must now also give its consent. As far as I know, the Icelandic Parliament will consider the case this spring. I hope there will be no further delays.

Let me now turn to Carbon Capture and Storage, CCS.

Low-emission technologies like CCS are key to reaching the goals of the Paris Agreement. Cooperation is necessary in order to succeed.

I am glad to see that CCS is mentioned as one necessary building block in the EU's long-term strategy. In Norway, we have the competence and experience with CO2 capture and storage.

The industry has been using CCS- technology offshore since the middle of the 1990s. We have two CCS-projects in operation.

We are now developing a new full-chain CCS demonstration project. This includes capture, transport and storage solutions. This new focus is on industries with few other options for large emission reductions. This includes both cement and waste incineration.

The plan is to transport CO2 from the industrial sites, and store it offshore. The reservoir will have extra capacity. This allows for more CO2 than the volumes planned from Norwegian sources.

The project is European by nature. It includes large European companies like Heidelberg Cement, Fortum, Shell, Total and Equinor.

Together they will establish a fundament for a common European CO₂ infrastructure.  

Energy intensive industries account for a quarter of the EU's CO2 emissions. For some industries, like cement, there is no existing alternative. For other industries, like waste incineration or use of biomass, CCS can provide negative emissions.

CCS represents an opportunity for Europe for new businesses and jobs. CCS has the potential for widespread use, but is still very costly. It still represents financial risk.

This means that we need more cooperation, a clear political will, and sharing of cost and risk. To spend public money on a new CCS project in Norway, I must convince my colleagues in the government that the project is relevant for Europe.

The main aim of the project is not cutting Norwegian emissions, but to get a technological leap for CCS. This is why we would like to see co-funding. It would also help to see other European CCS projects make use of our planned CCS infrastructure. This is of mutual benefit.

To my conclusion: Let me underline the good and close relationship between Norway and the EU in the energy field. This is not self evident.

A good relationship is never established once and for all. It takes effort and work - every day!

With the EEA agreement, the EU and Norway can celebrate 25 years of strongly committed relationship. I think we should be proud of this. And I look forward to a continued our close cooperation going forward.

Thank you for your attention!